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SignalFire raises over $1B as LPs embrace data-driven investing | TechCrunch

Apr 07, 2025 - techcrunch.com
SignalFire, an early-stage venture firm founded by Chris Farmer, has successfully integrated AI into every aspect of its investment process, from identifying promising startups to assisting portfolio companies with recruiting and marketing. Despite initial skepticism about using data-driven strategies in venture capital, SignalFire has proven its approach by securing over $1 billion in fresh capital, bringing its total assets under management to about $3 billion. This marks the firm's largest funding round, surpassing the $900 million raised two years ago. The new funds come from significant institutional investors, including CalPERS, the largest U.S. pension fund, which committed $100 million for the first time. SignalFire's focus on seed and pre-seed startups, combined with its ability to continue investing as companies grow, appeals to large investors seeking exposure to young startups at scale.

SignalFire plans to continue investing in sector-specific AI startups across healthcare, consumer, infrastructure, developer tools, and cybersecurity. However, it avoids companies building foundational AI models due to the rapid evolution and potential risks associated with such investments. Instead, SignalFire targets businesses with unique, defensible technology, as exemplified by its investments in companies like Grammarly, Grow Therapy, and EvenUp. Farmer emphasizes the firm's ability to identify trends early and leverage its scale to dominate seed-stage investments, setting it apart from other venture capital firms.

Key takeaways:

  • SignalFire has secured over $1 billion in fresh capital, bringing its total assets under management to about $3 billion, marking its largest funding haul ever.
  • The firm integrates AI into every aspect of the investing process, from identifying promising early-stage startups to assisting portfolio companies with recruiting and product marketing.
  • SignalFire's strategy focuses on seed and pre-seed startups, allowing large institutional investors to gain exposure to young startups at scale and longevity.
  • The firm plans to continue investing in sector-specific AI startups, avoiding companies building foundational AI models due to concerns about defensibility and rapid advancements.
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